Is the big problem that we lose refining capacity during a big storm, not well productivity, since we have such a huge strategic reserve?
“Is the big problem that we lose refining capacity during a big storm, not well productivity, since we have such a huge strategic reserve?”
Exactly the trading call is to short oil and long gasoline.
Refining losses due to shutdowns are inconvenient, but not a problem in any but the short term. Europe (even China, too) have excess motor gasoline available for export because of the changes in their laws over the past 3 years.
Refinery losses due to physical damage will hurt distillate prices (#2 oil, aka diesel, aka heating oil, and #1 oil, aka jet, aka kerosene) far more than motor gasoline prices because of the worldwide demand shift TO diesel for the past 2 years or so, and the future continuing shift toward it. With a lot of storm damage, motor gasoline rises perhaps $2.00/gal, but diesel might rise $5.00, with huge consequences for the economy.
Now, all of the above has to do with incurring serious production in combination with refining losses. If the refineries are (mostly) intact and down for only a short time, sure, we'll see a spike in product pricing, but it will be short-lived.
If refinery damage is minimal, NG production losses -- especially if they become severe, as in 2005 -- are more important to the economy in the medium- and long-term.